Remedy Entertainment Oyj (REMEDY) Earnings Call Transcript & Summary

Welcome to the very first Capital Markets Day of Remedy Entertainment. I'm your host, Lauri Haavisto, and I'm also the Investor Relations Manager here at Remedy. During the next 2 hours, I have the pleasure of introducing the Executive Team of Remedy. They will take us behind the scenes of the company and answer 3 simple questions. How do we develop games? How do we sell them? And how do we keep our players and employees happy? We will have short Q&A sessions after each presentation. So please send your questions and comments by using the feedback form on the webcast page. But now it's time to meet our first presenter. He has nearly 2 decades of experience from managing game studios, and I can't wait to find out what he will tell us for Remedy's plans for the next 5. Please welcome to the stage, CEO, Tero Virtala.

Hello, everyone. My name is Tero Virtala. I'm the CEO of Remedy. At Remedy, we are starting our next growth phase. As a background to our future direction, let's have a look on who we are and what makes Remedy so special. We are a category defining creative super developer. And what do we mean with this? We have the rare skills of creating world-class gaming brands. And out of these brands, we can develop distinctive benchmark setting high-quality games. We have the organization and teams to develop multiple high-quality games at the same time, which is quite different to many of the world's other AAA developers. At Remedy, we have always been a highly appreciated partner. With some of our future games, we continue to collaborate with world-class publishing partner. But now, we have developed to a stage when we are also building abilities to self-finance and self-publish some of future games. And at the heart of Remedy, have always been and are highly creative and empowered people and teams. We are an attractive home to these professionals. And while we do all this, we are a profitable growth company who is able to manage well its risks as well. When we then look at the games, Remedy is known for high-quality PC and console games, Max Payne, Alan Wake, Quantum Break, Control, games that have won the hearts of millions of gamers and alongside many industry awards as well. All these games have pushed the boundaries of creativity within our industry. They have built us new competencies. And game by game, they have been developing Remedy further as a company. And all these games, they do have selected common trades. Our creative strengths are based on our ability to imagine and create immersive worlds, interesting characters, memorable interactive stories around these characters in this world. And then all this is combined to highly polished action gameplay. You will later hear much more on this from our Creative Director, Sam Lake. But on a company level, it's still good to know that the same creative skills are also the foundation for creating new franchises in any entertainment media. When we continuously keep on expanding and pushing the boundaries of our creativity, develop our skills and create also new ones, we keep on building all the time new opportunities for our future games. Our creativity, the people behind that creativity, the games that they develop, are at the core of what Remedy is. What remedy has been now almost for 25 years or actually over 25 years now. In this long part, a bit over 3 years ago, we started a bigger transformation. Until 2016, we typically had one bigger game development team, always working on a one big game at the time. In the end of 2016, early 2017, we started to plan what would be the future Remedy, the Remedy for the next decade to come. In order to get to a sustainable long-term growth path where we could give even more carrier paths and opportunities for our creative talents for Remedy, more control of our future and ways to benefit more also on the successes that we would create. That transformation that we started was built on 3 key strategic guidelines. First, we would continue creating games on top of our world-class trends, but do it in a way that they would provide longer-lasting games, longer-lasting franchises. Operationally, we started transforming the company from single project organization to a multi-project organization. And while doing that, we would have the opportunity to work on selected work class partner brands, like Crossfire, but also to create and develop brands and games that we own. And for the past 3 years' time, we have systematically been following these guidelines. Now after a bit over 3 years, we can definitely say that the first phase of our growth strategy has been successfully completed. We have the multi-project organization in place. We have 4 game teams. We have almost 280 world-class talents, and we have a host of external partners, external talents, working with us for our games. During this time, we have developed control in 3 years' time with a budget of approximately EUR 30 million, an industry award-winning game and that is truly an impressive achievement. We have also done 2 Crossfire projects. We have been investing in the 3 brands that we own. We have been continuously strengthening our creative skills, technology skills and products skills. And as the aim was, by the end of 2019, we did enter into the growth path in a profitable way, which had been our goal. And now when we are in this path, we intend to stay here. And despite of the transformation and big changes that we have been going through, we have been keeping care -- taking care of our people and maintained a really work -- good work atmosphere. All this has definitely built us a stronger basis than we have ever before had. At the moment, we have four game teams, developing 5 games, Control with 505 games, Crossfire with Smilegate, 2 unannounced games with Epic Games and Vanguard, our multiplayer initiative. That is where Remedy is at the moment. And from this point onwards, in order to discuss where we go here, let's look at the global gaming market and how we see it developing. Video game market, a massive USD 160 billion market that keeps on growing. It keeps on growing in every geography and also in every main gaming platform. We at Remedy are focused on developing console and PC games for core gamers, or as we say it, big screen games for gamers. This means PC, PlayStation Xbox, both current generation and of course, the new generation, the next generation. Nintendo Switch has also grown to be a potential platform for us. And at the moment, there are a number of new subscription and streaming services that are marching on and opening up new avenues also for us. An additional important market development has also been how digital sales have overtaken physical. In digital stores, consumers have more choices, but this has also meant that high-quality games like Control, keep on selling for a long time. Our Commercial Director, Johannes Paloheimo, will get back to you on this. In addition to these higher level market developments, we see 5 additional trends that are very relevant to us. So the market continues to grow and change, but now stronger than ever before, new entrants are challenging the traditional dominant PC and console platforms. Yes, Microsoft and Sony just introduced the next-generation of consoles that are pushing the bar, taking the industry further. On PC side, Steam is strong and Steam is evolving. But Epic Games Store is also growing. New streaming platforms from big players like Google and Amazon are in the play. Subscription, streaming services in every platform are developing and are growing. Many big players are building their future positions in this giant industry. And due to the growing and transforming industry, content is more important than it ever has been. Content is the key driver for new platform sales. Content is the key driver for user acquisition for any new service. There is high demand for new games. There is high demand for good development studios. Then outside of the platform players, for big gaming publishers, IP ownership content is a key long-term focus. Due to all this, yes, consolidation is just accelerating. The first phase of industry consolidation has been targeted to game developers. Games are in high demand. Creating new high-quality development studios is slow and is difficult. Next, we are also expecting consolidation to start happening in the publisher space. Then there are also 2 key trends that more specifically affect games and also the type of games that Remedy will be making. First, PC and console games are becoming longer-lasting and longer engaging. With all the new services, all the new games, there is more and more battle for gamer's time and money. Games are focusing even more on retention, keeping the players longer time and not just selling the main game, but when serving the players for a longer time, also aiming to maximize the lifetime value of the players. Playing together, what's in serving, they keep on growing. And as one result of all these, players are playing fewer games, but spending more time and money in those games that they play. This, in part, just highlights the fact that AAA games are still a hit-driven business. Despite of the big market, it's not a big amount of games that succeed, but those that do, can succeed in a truly big way. When we have been thinking our future direction, we analyzed all the AAA console games, all the relevant AAA console games from the last 3 years' time. And especially the games that sold more than 2 million units. It was only less than 70 games. Out of these games, about 40% were pure single player games. And then when we started dissecting those in more detail and putting them into different segments, you can see that there are some giant parts that mainly platform exclusive, blockbusters, like the amazing games that Sony has been making. Then we are clearly seeing a trend that there are more and more big open world games, but often, they are from established big brands. And then we can see that there are those standout exceptions. Games that are meant for certain categories. And when they are really high-quality games, they get there, they provide something new for the category. They are taking the bar higher in there. And if the quality is good, they can succeed. Then when we look at the other games that are not within the 40% of the single player games, it's good to note that there are very few -- fewer multiplayer games. About 60% of the successful games combine single player and multiplayer. Where we come from, from expertise in the single player, we can say that single player continues to be a key element of big AAA successes of the future, but whatever the need, these games need to become longer engaging. So taking into consideration, the current gaming market, where we believe it's going, what are the conclusions for us? First, we definitely have a strong basis to build our future on. We have high potential brand. We have the creativity. We have technology meant for our type of games that supports our creativity. We have good games already out there and in development. We have seen that we can attract and keep workers talent and build great teams. We have the multi-project model that is now functional. Market has developed favorably to us. It keeps on growing. Yes, the markets are crowded, but we have seen that good games can sell for years. We have multiple good partnership options, but also with the digitalization, the barrier to self-publishing is lower. We are aiming for bigger opportunities. Our games will, step-by-step, grow bigger and longer engaging. We will also seek ways how Remedy as a company and our games can capture more value, but we do understand that there are great games out there. There are really good other companies as well. So we will be smart in what we do and how we do it. Our other core management team members will set more light on all of these topics. With all this, we are starting the next growth phase with ambitious, but still realistic objectives. Our objective is that by the year 2025, we have created several successful games and at least one major hit-game, the game that reaches the global top-selling starts and keeps on succeeding also after that. And as I have said, we have the unique rare creative skills. We can create the world's character stories that build the powerful brands. We will own at least 3 of this type of expanding strong game plans, and they will have long-term hit gain potential. We are all the time strengthening our commercial capabilities, and we will strengthen and build them to a point where we can select the right commercial model for each game, a model that best maximizes its value and its audience reach. For some games, it will mean self-financing and self-publishing. For some other games, it will mean working with world-class publishing partners. And great people continue to be a key focus for us. We aim to be the most attractive gaming industry employer in Europe. And we will reach these objectives while having year-on-year, a profitable business in which we have managed the risks. How we will do this? We have 5 strategic guidelines that we are following. These guidelines are then internally at remedy broken down into more detailed development projects and action areas. We are building of portfolio of recognized, growing game brands. We are creating bigger and longer engaging games in our immersive and expanding worlds. We are building further our commercial capabilities to maximize the potential that our games have. And at the same time, strengthening our position in the value chain. Production-wise, we have an iterative approach that game by game, we go towards bigger games with very professional and scalable game productions. And we keep on investing our people to have empowered, creative world-class teams and people. So we are starting the next phase in our growth. All this is a natural step in our development. It builds on top of what we have already built in recent years. And at the same time, this next phase will further strengthen our position as a category defining, creative super developer. A creative super developer that is starting its next growth phase. Thank you.

Thank you, Tero, for such a comprehensive presentation. I have a couple of questions for you. Let's start with a topic that has affected us all this year. How has the pandemic affected Remedy?

Definitely, it has affected. I think overall, we have been able to adapt quite well. As a gaming company, I think any gaming company has been in a fortunate position that people are spending more time at home. They are playing more games. So business-wise, we have had a certain, in a way, positive effect even in the sales. In our development, the projects have been proceeding well. So that's a good thing. But now when the situation has been becoming longer than anyone hoped originally, I think that some of the learnings that we have had that for those projects that are longer in the production, that are more in the execution phase where we know exactly what needs to be done and it's about the implementation, there is a -- in some projects, even more efficiency, and they are proceeding well. But for some earlier phase projects, where are communication, more cross discipline, planning is needed, we are seeing that we need to keep on developing all the time. But it's not that easy as we maybe earlier thought and then definitely, as with any company. Now when the situation has soon almost continued almost for one year, it's weighing on people. It's not easy for people. There are challenges. And actually, our HR Director, Mikaela berg, is going to discuss a bit more on this. But we have always supported our people and this has been one of the key focus areas also for us during this year.

Then a question, we do get quite often from the investors. What's Remedy's approach with mergers and acquisitions?

Yes. As I just said, there is definitely an ongoing consolidation trend in our industry. And it's, in a way, it's a 2-way street. Because one way, yes, there is a lot of interest towards Remedy, but we have seen that as an independent company, there are still so many growth opportunities. And so far, that's been our strategy, how we go on and seek in a way the next level in our growth and next opportunities ahead of us. Then of course, when we are growing, we have so far chosen that our path is the organic growth that we are -- we have the ability to attract talent, to build new game teams, to take our games to new platforms and expand them further. So that's also -- at the moment, that is still the main focus. But of course, we are keeping our eyes open. We have the multi-project model in use, who knows what will happen in the years to come. But so far, we have a clear strategy that we are following and we believe that will provide us a lot of opportunities going to the future.

Sounds good. Thank you for the answers.

Now another question we get quite often, how much does Remedy get from a single copy of a game and why bringing logic to our value creation, please welcome to the stage, Remedy's CFO, Terhi Kauppi.

Good afternoon, everyone. My name is Terhi Kauppi, and I'm the CFO for Remedy. I've been with the company 2.5 years, and I would say it's been a joyful journey. As Tero just explained, we want to run profitable growth business. It will manage risks. There is a lot of future potential for us, and that's why I will discuss with you about the value generation drivers for Remedy as a creative super developer. Why it is good to be in this industry and with this company? But let's start by taking a short look back. How did we end up where we are now? We have gotten the profitable growth track. We have been growing on a compounded annual growth rate of 21% in the past 10 years and we have always been profitable, which is quite an achievement in this industry. Our guidance for 2020 is to increase both our revenue and EBIT. Our latest release numbers are from the first half of 2020, and they state the good level of revenue, EUR 17 million and a margin of 19% for EBIT. We still expect the majority of the revenue and EBIT increase come from this second half of 2020. Traditionally, our profitability has been peaking along the game launches. In 2012, it was Alan Wake PC version, 2016 Quantum Break, and last year, 2019, we launched Control. But this profitability pattern is about to change. And I will later in my presentation, explain why. But let's next take a look how the multi-project model has shaped our revenue. We can see now, based on this illustration on our past year's revenue development that multi-project model has both contributed to the top line growth of the revenue and acted as a risk balancer. Should there be one project or a product, which is not that successful as we hoped, there are other streams that are compensating that. The different colors inside the pillars represent roughly the different revenue streams we are following internally. So we do not have all the eggs in the same basket. And it's also important that these eggs are different in nature between each other, as explained next. Here are the 3 main clusters for revenue generation models for a video game developer. In the upper part is the subcontracting model, where there are subsequent projects with a partner. And top of that, there is normally a royalty potential. Then in the middle part is the own IP partnering model. And there, it is normal that we receive the development fees during the project phase, and then there's additional revenue share potential. And the general rule of thumb is that more we receive the development fees during the project development time, the less is the potential for revenue share and vice versa. But with a successful product, all of these streams can be significant. Then there is the self-publishing model, which we currently do not have. There, the possibilities for revenues is much higher since we get the full potential for that. But on the other hand, there are no project development phase -- development fees received. So there's more potential, but also more risks. And next, like Lauri promised, let's take a look how actually the price play a pace for Remedy game converts in our revenue. And this example is based on roughly on Control gain. And we can assume here that a player buys a game for EUR 20 to EUR 70, somewhere in the world, in some platform, in some point of the time. There is a big variation in this, and the largest variation comes from the discount campaigns, which are always almost going on somewhere. The latest season was Black Friday and next season is the Christmas holiday season. The price elasticity for games is high. Discounts drive up the volumes, but then on the other hand, the sales happen at a lower average sales price. Then other aspects affecting the pricing are geography and bundling. The geographical aspects can be visible, for example, in Russia and China, with the pricing level, in general, is lower. And on the other hand, we can affect the pricing by bundling, for example, the main game and the DLC, the downloadable content, into one new product. And then there are the deductions. And first of all, there is the VAT. The percentage varies across the globe. And for example, in U.S., it can be 0%, and for example, in Hungary, 27%. And this amount does not transfer forward as a revenue. Then there's the commission for a platform holder or a retail chain. Then there are other costs: quality assurance, localization and especially for the retail side, there are distribution fees. Then the product needs to be marketed. And traditionally, the marketing efforts are very front-loaded. So they happen around the game launch pre-ample post launch. But also during the game's life cycle, the extensions and bundlings require additional marketing efforts. And after these deductions, we get the share of our revenue. And we have here used, as an example, 45% out of that. This is the deal we have with the 505 games for control. So you can see that there's a big variation. In this example, from EUR 3 to EUR 27, what we get from the consumer player price. That's in percentages from 30% to 40%. So in order to understand and analyze the game sales and in order to be able to forecast them further, we need a detailed understanding knowledge about the games, sales channels, discount campaigns, geography and these cost reductions. And to be noted that this is just an illustrative example. And with the different game and with a different partner, the table looks different. For example, with Epic games, we have announced that the revenue share for us is 50%, and then there is also the development fee recoup element, which is not here. So as it was visible in the previous table, it is clear that the good terms with the publishing partner are in the core of our profitability. The main elements in these aspects are, of course, the possibilities to large enough budgets for tens of millions of euros and the projects lasting for many years. Then we need to agree also about the budget sharing, the cost 3 groups and the revenue share. And also, it's important that we have a partner who has capabilities for marketing and other promotional activities throughout the games life cycle. And also, it's important that we build up such games that have the long-term sales possibilities and even increasingly going forward the capabilities for in-game monetization. So as an end result of these, we should ensure a good cash position for this project, which then again, can feed and give us better position when negotiating, for example, for a sequel for this product. And next, let's take a look how the cash flow thinking and accounting related to each other with our projects. So here is an illustrative example of a project which would be developed within 3 years and also the game's life cycle would be 3 years. And we would be then having the partner sharing the development costs with us. So the cash flow, it's rather simple. During the project development phase, we received the development fees from our partner, and then we pay out the investment. We pay out our own work and then external development. And once the game is launched in this example, in year 4, we start to then receive the royalties as a revenue share after the recouping element is first taken up. When comparing to the accounting, we need to take into account the capitalization. So during the project development phase, we will partially capitalize the costs. And this percentage comes from the share of onshore revenue out of the total expected return for this product and when the game is launched, we also then start to recognize as revenue the royalties. But in terms of timing, we might recognize them in a little bit earlier phase than we actually then receive the cash flow from our partner based on the payment terms. And then also, we need to depreciate the capitalized items during the game's expected life cycle and sales curve shape. There's some timely variation around here between these 2. But of course, then eventually, cumulatively, they end up with the same result. And now going forward, with the renewed strategy, how do we ensure that this value generation drivers are boosted even further? And what is our long-term potential? The core is to understand the long-term value driver cycle. And here, the most important thing is within games and brands. Our IP, what we own, it's the most valuable asset we have. But being able to build up attractive brands, quality games, achieving wide audiences and fan base, we can only truly ensure the longevity of the company. And Johannes and Sami will discuss with you more about these aspects later. Then it's clear that we need talented people. We need creativity. But we also to be sure that these marvelous creative ideas get transferred in the tangible playable worlds and get in the hands of the players. So we need also production capabilities, scalability. We need to scale up also our technology and reuse the content and do that in a timely manner. And Chris and Mikaela will discuss about these aspects later. Then there's, of course, the commercial position we want to achieve and the profitable growth we want to have. And these aspects lie around just as explained, around the partnering terms and also the mechanics in the product itself to be able to have the long-term sales and the monetization possibilities going forward. And then as a company, we would reach the good cash position, which again then feeds this whole loop forward in a positive way. So we need to have happy marriage of 3 aspects: creativity, technology and business. And now even going forward, it's really important to understand on a portfolio level with -- that we have multiple different projects which balance the risk and the reward. In the self-publishing model, there is clearly more reward, but there's also more risk. And then the other side is the subcontracting model with limited risk, but also limited reward. But it's still good business. And this subcontracting model we have currently in use with our partner, Smilegate, in Crossfire operations. And then in the middle of this is the own IP partnering model. The model we have currently with 505 Games and Epic Games. But there are also many different dimensions within this field, and we must play our own game smartly to choose the correct structure -- or structures in this field. And also, we want to look how these products enhance each other's success going forward. Traditionally, AAA games have had a sales curve with the majority of the sales happen around the game launch. This is especially true for a game within an established IP. For a game in a new IP, like Control, it might take a longer time before the peak is achieved. Then normally, the main game sales can be later on boosted, for example, with DLCs, the downloadable contents. Then there's the subcontracting model, which is more stable in nature. And then there's the GaaS model, where it normally takes a longer time before the higher sales level is reached because the product is launched in an earlier phase of development. But on the other hand, it can have many years of revenue generation possibilities. What is the total potential there? The first block can be subcontracting model. And on top of that, there's normally the royalty potentials. Secondly, we can have our own IP partnering model, where we have the development fees and the revenue shares. And they can be posted by DLCs. Then we can have another one like that, development fees and revenue shares and DLCs. Then if we ended the self-publishing model, we understand that there, the potential for our revenue is even higher. And on top of all this, we can slowly build up our GaaS model. And EBIT percentage kind of naturally follows this trend as the more we have game sales revenues out of the total revenue, the higher the EBIT. And this illustrates one sort of potential realistic future scan area for us. And should one of these games be a massive hit, like we aim at, then the graph would look even better. So there is a lot of potential. So let me summarize. We understand that the core of our success are high-quality games and long-lasting brands. We understand also the potential with self-financing and self-publishing, so we want to strengthen these capabilities and we also want to look our projects and products, not only on an individual business case-wise so that they would be profitable, but also on a portfolio level, so that we understand what is the total profitability for Remedy as a whole company and in the longer term. And we see that this is clearly not a sprint. This is not even a marathon, but this is an ultra-run. And one more final thing. To be more transparent towards the market, we've decided that we start to give out the business reviews also for quarters 1 and 3 and in addition to the half year result releases we already have. Thank you very much for your attention.

Thank you, Terhi, for such a detailed presentation. You mentioned that the deal terms -- the publishing deal terms are in the core of the business. So how would you describe the deal terms with Epic games?

The short answer is that we think that the terms are good. They are good in such sense that business-wise, there's the financing they are providing us and then good revenue share. But also in that aspect that we can retain the IP and also have enough creative freedom with the product.

Then continuing on the actual sales figures. What are the benefits of digital sales for a developer?

Yes. Like it was visible in the table I showed, the cost deductions in digital channels are lower, which means then the higher potential for us for our revenue share. Also, we see that it's possible to have a longer-term sales possibilities in digital channel like they're also mentioned. And in addition, when thinking about entering the self-publishing, it is easier in the digital environment than in the physical one.

Thank you for your answers.

Electronic Arts, Square Enix, Ubisoft during almost 3 decades, our next presenter has seen it all, which is German sense and sensibility. He will now tell us how Remedy can finish our high-quality games with less money and time. Please welcome to the stage COO, Christopher Schmitz.

Thanks a lot, Terhi. Great presentation. So hello. My name is Christopher Schmitz. I'm the Chief Operating Officer at Remedy Entertainment, and I oversee the studio's game development efforts. Today, I will talk about the successful creation and delivery of our games and how we're actually getting organized. So as Tero mentioned earlier, this is who we are. We are a category-defining creative super developer. That means a lot. We develop distinctive games, benchmarks-setting games, and we do it professionally in a multi-project environment. And that is in terms of production. So today, I would like to help you understand how we develop games and the reason why it's so important how we do it because we really got to get this right. AAA Game development is often about selling a lot of money that can be EUR 100 million or more on just one single game. And I can tell you one thing. This is often done with a high degree of inefficiency, causing a lot of waste. So a lot of money actually going into the bin. That's not what we want. So at Remedy, we have done control for just about EUR 30 million, and it's a cutting-edge AAA game experience. That's what we have done with the model we have implemented. So let's have a look at the current state of game development. At Remedy, the multi-product model has been built, and it's functional right now. That's what we can say. We have 4 game project teams in place, and next to the several centralized production support services. This gives us a good basis to both organization and also to build future teams for Remedy because that's what we are doing. As you can see, our games have different sizes and during the development stages, so the amount of talent being used is always highly optimized for the actual need at that specific point in time for every single project. This allows us to be efficient. This allows us to be effective, getting the maximum value for our budget, and we can reduce waste like that because we make sure the money goes into the right places. So let's have a look at our current production capabilities. This is where we are now in 2020. We are now managing huge teams. Here are the numbers on how we are set up. We have 5 main games in development organized in 15 different projects, delivering our games to 10 different platforms. That's a lot for our studio. We have developed our production capabilities a lot in the recent years, a lot of focus is going into that. And our teams now employ 274 Remedy talent out of 14 different disciplines. And they get supported by 31 external development studios as partners with more than 370 external talents working on our games right now. So we have now an increasing number of highly tuned internal game development teams as well, all of this is supported by a growing partner network of highly qualified external developers. When we review our path from where we are coming from and where we are now for the future, we really have a strong basis to build on. As Tero, our CEO, showed us one of our strategic guidelines for the future is iterate towards bigger games with professional and scalable game productions, while boosting creativity. And I really like that sentence because it really summarizes what Remedy's all about. It's about many elements of this already implemented in order they are working. And the new ones, they will be developed over time, one thing at a time. So let me show you some of the key focus areas and how we make them. Let's have a look at scalability. Scalability is one of the critical things in AAA game development. In game development, it's all about great teams. It's not a studio management that creates the games, but the great teams we have here, they create the games. They put so much of their hearts. There's so much of their souls into our productions to deliver outstanding gaming experiences for our players that they appreciate so much. So scalability in game development is important. We want to build bigger games. We want to build better games, and we also want to build more of them. Scalable game development brings us a lot of benefits, but yes, it also brings a lot of challenges, things like we need -- when we do more and bigger games, we need larger teams, obviously. And if the teams are getting larger, that means more complexity for our teams. And more complexity is also more difficult to manage. It's as easy as that. More complexity in terms of communication, dependencies, planning, decision-making and so on. I think you can assume that for yourself. And then we even have things on top of that, like we have the competition for talent between resources, between projects, between different studio functions. We have -- we, as a studio management, need to build the available talent pool for the study as a whole so we can serve all of our projects when they need people. And also, we are looking into getting -- we have dependencies between projects, and we are looking into getting synergies out of all the projects so they can on top of each other, and that needs to be managed as well. So that's quite a challenge. So how do we solve it? In order to enable our teams to master these challenges, we want our game development teams, every single one of them to be highly empowered and to be a highly empowered creative fellowship. So what does that mean for me? For me, that means they should really own and drive their own creative vision. They should be really operating as autonomous as possible. They should drive their games to become the best possible experience without micro management, without too much guidance from above, I feel it's very important for our teams. So they should be empowered to make important calls for the games on their own. They should be working autonomous. So they can drive their own thing for we need to give them everything they need. We need to empower them as good as we can to remove any obstacle out of their way and give them everything they need at a time when they need them in order to allow them to be successful and they need to be highly aligned because we need to make sure all the teams are actually delivering against the high level studio guidelines, the quality requirements we have in place and so on without them losing their autonomy. So in order to do that, I believe, it's good to say, we are rather a large fleet of speedboats than one big ocean liner. Because game development is largely complex, we need scalable teams. A big ocean liner has just one captain, just one steering wheel. It's way more difficult and way slower to turn around, and it's way more complex to operate. But when we have a look at a fleet of small speedboats, every single boat will be able to operate way more efficient, way more agile, faster, so they will much better reach their bests, very specific destination with less overhead for better cost efficiency. That's what we're looking for. So how do we do this then? We had Remedy believe that a strong team is built around great leadership. We have our game development teams owning their projects and driving them forward. Right now, 4 main teams. They're supported by centralized shared service unit, different ones to empower them to give them everything they need when they need it and overseen and empowered by studio management as well, to agree on high level objectives, high level visions and then let them do what they can do best, creating great games. So how does it look in detail, let's dive a little bit into how the project teams are organized. What we can say, we are not organizing it as a project, we're organizing it as a game program. We implemented the structure to allow scaling for a great degree of autonomy and empowerment. This initiative is not organized as a project, like I said. It's a program of project. That means a lot of projects altogether to deliver against the required target, the game experience. We do so to reduce the complexity and to empower our teams, and it all starts with the leadership team of that team, of that program. So that's about the executive producer. He's basically accountable to the company core management for the delivery of the game against the mandate. He's basically the CEO of the project. And our core team members helping him on fulfilling that mission, the game director, the development director, product director, tech director and art director. While the game director owns and drives how the game place looks, sounds and feels, creative director, the development director is actually owning and driving the operational model and to ship again in time, budget and quality. The product directors, the commercial officer, basically, in this production, he makes sure we are developing the right game for the right markets, for the right players, and they will enjoy what we're delivering and he knows what's the competition in that market space and how can we stand out of the crowd to be commercially viable to deliver a viable business case. Then the technology director, game development is all around technology, about the latest state of the art features about any nation, about rate tracing and so on, and that person is driving that forward. NDR director translating the game vision into good-looking graphics, which is one of the key things of Remedy Games because our games are usually visually stunning, outstanding. That team, we call the core leadership. They're getting supported by an extended leadership team of different craft leads also on a program level owning and driving the program from their specific perspective, for example, a visual effects lead would own the whole program from a visual effects point of view to make sure all of the project team members will deliver against the vision on that. Then where the majority of people are actually working are the strike teams. So the strike teams are these little speedboats, the little speedboat that can sail as fast as possible, take corners and cut the road, so they actually find the best destination as efficiently as possible. So we cut projects down into smaller parts that can be a level, that can be game play, specific features. It could be the multi-player, it could be the single player. And that is then owned by one, individual strike team with its own leadership team, and they're highly empowered to deliver against the vision as defined by the extended and core leadership team. And we have a lot of them, and it depends how the project is actually structured and how it's broken down. It's looking different from project to project. But there, in that way, we can make sure we reduce the complexity and we allow our people to move as fast as possible producing the best possible quality output. When you're such a large and kind of complex structure, it's very important to keep a great degree of alignment. We talk about high level of autonomy path with a high level of alignment. So we have implemented a process for that like. We start with a very specific mandate and we carry it all the way through. It's minimizing our risk. It's increasing our predictability. We had some problems in the past that things were not clear enough and we have addressed that in the last years to make sure the project team knows what are their success criteria because this is where we start. We built a mandate. We defined the objectives, the success criterias. We, as a studio management, delegate that to the executive producer, the CEO of the project. He then takes that one is accountable to us and then delegates the sub areas on this core team of directors, the extended leadership and eventually also then on the strike teams, the little speedboats. The credits and competent team owns the game. They drive its development. The mechanisms are in place to give them enough guidance, give enough support, but they drive it in between the stage gates in a highly autonomous way because at the beginning of every stage, they know what is expected of them. And then at the end of the stage, we check-in with them together to make sure we are still well-aligned, the best team knows in which direction it needs to move, and we also take decisions together if something needs to change. So after the mandate was created, we go into a concept stage. The credit vision on what we're going to create is then aligned at the end of that stage, the proof-of-concept stage, it's already about software. So we are implementing the core game play into the game. We show that already at that stage to external experts to make sure we have really managed to find the fun. And then it goes for the rest of the stage-gate process to production readiness, gives us a credible plan, a fully functional team, the whole game really planned out. Then we go into a production stage, where the heavy lifting takes place and the game actually gets built together. And then latest to the release candidate stage, where we make it ready to get shipped. And what's very important to say is that at the beginning, we're highly creative, highly adaptive. That means a small team can make up ideas, change it the next day, make up another idea, discuss it with us, discuss it with anyone else. We change it again. And then the whole thing will evolve and will become better one day after the other. And then the further we go into the stage-gate process, the more predictive this process becomes because latest at the production stage, we need to have a very good understanding of what game we are actually building here because this is where the heavy lifting takes place. If by production, you don't fully understand what game you're building, you will have a lot of waste, and that's something we have really improved on. And just to show why this is so important, this is basically the allocation of talent on the projects. And you can see during the production stage, this is where the majority of money gets spent so the early stages, they could be prolonged. It's not too expensive to do that to give the team a little bit more time to find the fun in the game. If that kind of problem happens in the production stage, that gets very expensive. Just to give you something from the timings, the mandate stage could take a few days or a few weeks. High concept proof of concept stage takes 2, 3, 4 months, 5 months, maybe something like that. And then production is actually, which takes a lot of time that can take a year or even longer with the highest amount of people and then the game gets shipped. And that's also important because of our multi-project model. We can scale up like that because many independent developers only have one game, these single project studios. They have the full headcount from the very start. It's very expensive, very counterproductive, very wasteful. In early phases, a new game needs time to find its vision and design. It's therefore best done with a small team in a very incremental iterative way. If there would be a big team assigned to a project very early on, a lot of people would just be waiting, waiting for stuff to do, and they would basically harass the game designers and say, "What should I program now?" And they said, "Well, I don't know yet." And that's very wasteful. That's something we have overcome at Remedy, and that's great. And that's thanks to our multi-project model. So when the game then gets shipped, we go into a live stage. And the live stage looks around about like this. We ship the game, we deploy it on a server, people can start playing it, we measure the success of the game, we measure how the people are playing it for real. We then learn. We discuss with our community. We understand how are the players playing this game for real, and then we continue with our design process. We build a new version. We deploy it again to our players. And that's, in the best case, a cycle that takes years and years and years because then the game is very successful and highly appreciated by our community. And that's what we are going for. That is the future of video game development. Let's come back a little bit to the supportive environment, because that's a very important key criteria here at Remedy. I have select like, the supportive environments are like IT, QA, cinematics, just to mention a few. But the key ones I want to talk about today is Northlight, Ex-Dev and the PMO, the Portfolio Management Office. So a quick look at Northlight. That's our game tech engine team who built the rendering engine, the tools and all the supporting services in terms of technology for again, dev teams. It's an expert team that helps all the game projects. They have the ability to do groundbreaking features. Things like the physics and the ray tracing and control are a good example of that. These are things other teams just cannot do that easily. And this gives us a great, competitive advantage. And they also help with the iterative development and all the synergies around the projects because they're building engines, they build pipelines, they build technology, we're going to reuse in the next games, and it will become better and better over a period of time. And that gives us a great competitive advantage as well. Another big topic for the scalability, because this is one of our key topics here, is External Development. It's a key for scaling up the company. We implemented a structure to allow scaling for a great degree of autonomy and empowerment, that's what we already discussed. But our teams are also scaling these efforts not internally but also to the external. So we have strong partners onboard to help us shipping these games. And we have broken it down in 3 key areas. It's co-development. Co-development is where we do surgery on the open heart together like a feature team, strike team who's working on one specific feature very closely with other teams. It could feel like they're sitting together in one office, it could feel like they're just one part of Remedy. But -- because they're highly, highly integrated, and that's also the future of video game development, it's scaling through co-development. Then we have external productions. That's very handy and good for outsourcing complete productions, like we've just done that recently. Control for the Switch was one example for that. So we have done that with an external partner who did the complete Switch part and we had oversight on that, obviously. We had accountability for that, but heavy lifting and also the leadership on that on a detailed daily basis was done somewhere else. And then the traditional outsourcing. This is about art assets, audio, case-by-case. We are working with a lot of partners. This is something which is the most elaborated area of External Development. And this is what we're using every single day right now. Without that, we couldn't build the modern AAA games anymore. And then the portfolio management office is also a very important shared service, supporting the multi-project environment. So that we have the projects, the 4 main game teams we're operating right now. The projects are all subject to internal competition and synergies. They are competing for talent, for example. Like we have one pool of talent, and we have signed them on the different projects at the right point in time when they need them. So they are basically in competition for the same studio-wide talent pool. So we must build a talent pool for anticipation of the long-term project needs and the studio needs, and the projects will also face dependencies between each other. As we want them to enjoy synergies, we can create -- we want to create between them, like tools, pipelines, assets, features, other key learnings. The PMO, Portfolio Management Office, is driving all of that and more. They drive like the stage gate process. They help improving our overall level of project management competence. They are helping with production pipelines and tools to coordinate that. They make sure to get the right person on the right project at the right point in time. So this is basically the central hub around how we distribute our resources in the studio. So we talk about scalability. We also talk about iteration. iteration means that every game builds a stronger basis for every future game. Because our goal is to build better games, bigger games. But we want to do that more efficient and with less risk. For example, efficiency is a lot about investing money, the cost, the expenditure we have from projects. If we manage that pillar right, we can do much bigger games without skyrocketing budgets. And that's something we are looking for, and we are investing a lot into that, and we can make that happen. So this means more value for our players by building games on top of what we already created and learned. This can be engine and tools, this can be gameplay systems we've created that work well and can be used in another game. It's about the game world and the underlying universe, the Remedy universe. It's about the development experience, just the competence of our people we have, with every single data here, they will learn something, and that creates value as well. It's about an expanding content library. All these assets can be used in other games as well. And obviously, it's about our IPs. It's the player feedback we get. The players are the center of our attention. We love our players, we are in very close contact with them. We want to understand how they play our games, and then we can build on top of that. And then the next game will better fulfill their needs to make them way more excited than ever before. And to just show it as a graphic, this is actually how it looks like. With the same amount of investment and the same amount of time, we can build bigger and better games. Game 1, game 2, game 3 are basically from the same franchise. And the second one is already bigger than the first one because it builds on top of the first one, the same for the third one. And this will give us a competitive advantage. So of all, it's about Remedy delivering hit games in a predictable manner in fashion. It's about projects at Remedy are well-designed, well-planned, well-led and well-resourced and all of that in a multi-project environment. So we have the game program, that's one single game. With our top talent, we put on that, they will produce the best product value for our players. We give them autonomy and alignment, we give them empowerment to take their own decisions, we give them our tailor-made technology done by the Northlight engine team and the pipelines and workflows they can use that get better over a period of time. And then a very highly supportive environment. So they get supported when they need it, and we can leave them alone when they want to take their own decisions. That's causing the best product value for our players. As some key takeaways, Remedy is about professional game development, a well-organized and reliable studio with organized projects, about synergies, so we can build on top of what we already have, more value for less investment. Scalability because we want to deliver significantly more than we otherwise could. Thank you.

Thank you, Chris.

The feedback page is absolutely flooded with questions, but we have time for one. You have plenty of personal experience from big international studios. How do Remedy's operation compare to them?

That's a very interesting question because I think Remedy is in a very long journey. The company exists for 25 years. It was basically borne as a very creative small studio. Since a few years, it's in a big growth phase and you can really see how the creativity meets getting better organized. And since coming here, I'm very impressed how well the developers are accepting that. They're really asking for that they want to get better organized. Because in game development, if things don't work out, it often ends in some kind of crunch, and that's something nobody wants, and Remedy is very good in avoiding that. And therefore, the developers are not really resisting that. That's really good because in other studios, it can look very different. So I think we have a good way ahead of us for getting our teams on board with that. And give them what they need, so they can be successful.

Great to hear. Thank you, Chris.

Thank you.

And now I think we've all earned a small break. So for the next 5 minutes, we're going to watch a couple of game trailers, of course, from Remedy's games. During the break, Please grab a cup of coffee, pet your dog, go to the bathroom, but please stay tuned because after the break, we have some exciting news from our publishing unit. So see you after the break. [Break]

Welcome back. I hope you have enjoyed our Capital Markets Day so far. Now let's take a different kind of commercial break and take a deep dive into the exciting world of publishing and marketing. Please welcome to the stage, CCO, Johannes Paloheimo.

Good afternoon, everyone, and thank you for tuning back in again. So the strong financial position, shipping critically acclaimed Control and the systematic long-term developments we have done has generated high interest within the games industry and given Remedy a unique business position that the company has not seen since the Max Payne days So let's have a look at some of the developments we have done on the commercial side to get where we are today. So since setting out our growth strategy in 2017, we have been focusing on forming the right business partnerships, building competencies to support our games to succeed and fulfill their business potential, aligning our games with market and player needs to reach a wider audience and to build a strong foundation for the future. So having the right business partnership really helps Remedy to punch above our weight, our aim is to build a partnership that complements each other where Remedy has the freedom to conduct our business and develop our strategy on our own terms, and to make sure that when Remedy succeed, our partner will succeed as well, and vice versa. Our marketing partnership helps bring additional visibility and promote our games on platforms otherwise hard and expensive to reach. With Control, we had partnerships, for example, with PlayStation, Epic Games Store and NVIDIA. These are very significant partnerships. The development partnership with Smilegate on Crossfire allows Remedy to create games leaning on our core strengths while going into a completely different genre and market. This also helps grow our teams and bring in new capabilities into the studio while at the same time, not limiting us from creating and building our own and new IPs. The publishing partnership with 505 Games and in reality is more of a co-finance, co-publishing model. The partnership enables Remedy to have full creative control, full IP ownership, it puts no corporate development limitations on Remedy, and it allows for shipping the game on multiple platforms. These requirements could not have been achieved with any other partner back when we were pitching Control. And our latest publishing partnership with Epic gains allows Remedy to continue on the path set forth with Control and 505 Games, but this time, without Remedy carrying part of the financial risk. And in the case of Epic, their deal terms could not have been matched by any other deal that we had on the table to choose from. So now let's have a look at some of our internal developments. A big focus area has and will continue to be, is to strengthen our internal Remedy Publishing team's resources and capability to better support the publishing and commercialization of our games. Remedy Publishing is a cross-functional team that works closely together with our game development teams, with finance and with our external partners. We are now a team of 9 people strong, up from 4 people just 2 years back. And the team has a wide set of expertise ranging from marketing communication, community management, market asset creation, product management, user research, data, analytics and commercial developments. As Chris mentioned in his section on strengthening the project core leadership team, we have structured our project leadership teams to have commercial owner inside of each project team. One of the responsibilities of the product director is to help our game teams to become more player- and market-driven. It's the product director's role to help align our games with the right target audience and market demands. This is done through systematically conducting market research, target audience analysis and user testing. And to best support our growth plans, it's also very important that we work closely together with finance to help support them with financial forecasting and aligning our business cases with the desired investment risk reward ambitions. And finally, Remedy Publishing supports our publishing partners to help maximize the commercial potential of our games. And the engagement level will differ from -- differ from games and the game needs and also on the partnership arrangements. So let's now have a look of how all of this has translated into our games and projects and how they have succeeded. To recap, these are the 5 game projects that we have in development, 4 for internal brands and 1 for an external brand. Now let's jump into Control. So launching a new IP is a big challenge, and we knew that with limited resources, creating wider awareness for the game will take time. Therefore, after launching Control, our focus with 505 Games has been on increasing the awareness of Control to capitalize on the sales potential of the game. We have continuously been working on promoting the game through new content updates, bringing the game out to new platforms and stores, and running targeted advertisement. Throughout these activities, the awareness of the game has steadily been increasing over time as has the revenue streams. And as Tero mentioned in his presentation, the market has been rapidly shifting from a physical retail market to a digital market. And operating in a digital market allows for more freedom to actively manage promotions and discounts as well as more targeted advertisement and promotions on digital stores. And we have, with 505 Games, taken out all the benefits of this rapid shift. The result of working to obtain the full business potential of Control has led to that never has a Remedy game been so widely available. Control has become a truly multi-platform game. Control is available on various PC digital stores, PlayStation 4, Xbox One, coming soon to PlayStation 5 and Xbox Series S and X, and the game is available on Nintendo Switch and switch cloud service and Amazon Luna cloud service, and there is a wide variety of platforms coming to this list in 2021. And opportunities like PlayStation Now and Xbox Game Pass, which just started, has also provided additional awareness for the game and these B2B deals are also significant revenue streams. On the content side, since launching Control, we have been releasing 5 major content updates, 2 free updates, 2 paid expansions, and finally, the Ultimate Edition version that bundles all this content into one ultimate package. All of these content updates has given us the opportunity to talk about the game, promote the content and run campaigns to drive sales. And speaking about sales, Control continues to sell strong digitally. Last month, November, 15 months after the launch, we actually made a sales record in terms of units sold. This is thanks to Control being a high-quality game, the increased awareness and the promotions and sales opportunities selling digitally brings. And to date, Control has sold over 2 million copies, and this is a major milestone for Remedy and our partner 505 Games. This makes Control, Remedy's fastest-growing new IP since Max Payne. And to illustrate the rapid shift towards digital sales. Last year, physical still accounted for about 40% of total sales. But this year, physical has dropped to less than 10%. And here, you can see the digital sales dynamics of Control and the sales effect of promotions and discounts, and this is from launching the game until the end of June this year. Next, let's have a look at Crossfire. So the collaboration with Smilegate started back in 2016, and Remedy is building the single player operations to be part of their Crossfire multiplayer franchise. Remedy's revenues are based on development payments and with an option to future potential royalties. And it is important to understand that Remedy's role is to create high-quality content for Smilegate, and we're not taking part in publishing that content. So when the content will be released is solely up to Smilegate and it's publishing partners. Crossfire is not a very known game here in the West, so most of you might not be familiar with the brand. But it's actually one of the most popular game brands in Asia and China, and Smilegate has strong ambitious to make Crossfire into a global brand. The game was originally launched back in 2007. And as you can see from the SuperData research here on the right, the game is still going strong 13 years after launching, continuing to be a top grossing game on PC. Smilegate is very actively working to grow the Crossfire franchise, and Remedy's single player operations are playing a key role in this expansion of the franchise. And Smilegate is working to bring Crossfire X franchise consoles, together with Microsoft. There is a movie in the works together with Sony Pictures. There is a Cross Fire drama series in China and various other game projects like Crossfire Mobile in China with Tencent. And so you have been following Remedy for quite some time, have heard us talk about Crossfire HD and Crossfire X. So let me break down these 2 a little bit more and add some context for you to better understand what they are. So Crossfire HD is a continuation to the Crossfire game in China. Crossfire X is a new console game in the Crossfire franchise. Crossfire HD is for PC and Crossfire X is for Xbox One and Xbox Series X and S. Crossfire HD has gone through closed alpha and open beta phases throughout 2020, and Crossfire X is to be released in 2021. Both games are being developed by Smilegate, and Crossfire HD is being published by Tencent and Crossfire X is being published by Microsoft. And Crossfire HD will include Remedy's single player operations and Crossfire X includes Remedy's single-player operations. So to update you all where we are now, so Remedy Entertainment has completed the majority of its work on Operation 2 for the Crossfire franchise with some development still remaining on series X and S versions. We're preparing for the upcoming Crossfire HD for PC in China and for Crossfire X for Xbox globally in 2021. And we're looking forward to continuing our great partnership with Smilegate on the Crossfire franchise. Talking about great partnerships, let's hear from another one that we are now building. [Presentation]

Now we're moving to the territory where our lips will still continue to be see for a while. So the projects undertaken with Epic Publishing in the spring are still to be announced. So continue to have patience with us. You will be hearing more about these when the time is right. But it's worth recapping that these are 2 separate games, one bigger and one smaller. And for all of you who like forecasting and modeling sales, let's go through some of the key deal terms that we have with Epic. So Epic is funding 100% of development and Epic will invest over EUR 10 million into marketing and after development advances and marketing investment has been recouped, Epic will pay Remedy 50% of net revenues received. And I've been talking about how important it is to select the right partnership for our games. We had multiple concrete publishing options, but Epic was the best fit for these games and for Remedy. Remedy gets to retain full IP ownership and without limitations on future projects and corporate developments. And in return, Remedy is playing a key part when supporting Epic in its ambitious plans to shake up the publishing business. And then we have Vanguard. We've been very quiet about Vanguard, and we will continue to be so for quite a while still to come. So again, please have patience with us. You will know more when the time is right. Vanguard, it's just what the name says it is. It's Remedy's way of exploring a completely different segment of the market than that we're doing with our more traditional games. It's a long-lasting service-based multiplayer game that leans into Remedy's core world building and narrative strengths. We're approaching building Vanguard step-by-step, iteratively testing and learning along the way. So we're taking our time, but first, external concept evaluations shows promise. And yes, Vanguard is being designed as a free-to-play game. And for now, we're self-funding the game, and we haven't decided yet what the publishing model for the game will be. So as you can see, from our internal developments and some of the first fruits, we have been building a stronger foundation for the future to continue improving Remedy's position in the value chain. And to best support the next phase of our strategy, we will continue to focusing on increasing the overall business potential of our games by bringing market and player understanding to the center of our game projects and building business cases with bigger success potential for Remedy. We will continue working with great publishing partners on selected games, and we will continue to build competencies and capabilities to be able to self-finance and self-publish selected future games. Thank you, everyone.

Thank you, Johannes.

In the feedback section, someone was actually commenting on whether Remedy will finally release some game sales data, and we finally have it, over 2 million copies sold. But talking about some other games, you mentioned that Remedy has completed majority of the work on Crossfire Operation 2. So I assume there's Operation 1, how did the collaboration begin? What's the history?

Yes. So there is an Operation 1. And Remedy announced back in 2018 that we finalized the majority of the work on Operation 1. And as I mentioned, it's up to Smilegate and it's publishing partners to decide when Operation 1 and Operation 2 are going to be published. And for the question on how the partnership came about and all of this. So it's one of these funny stories when casual introductions at game industry events bear some really good fruits.

That's great to hear.

But now let's move on. Our next presenter has experienced from both pharmaceutical and the music industries. So no wonder she ended up in a company called Remedy Entertainment. Today, she will tell us how Remedy succeeds in attracting and keeping world-class talent. Please say hi and welcome to HR Director, Mikaela Öberg.

Hello, and thank you, Lauri, for the introduction. Yes, my name is Mikaela Öberg, and I'm the HR Director of the Remedy Entertainment. I have been working at Remedy for a bit over 4 years, and during those years, we have been growing and developing to be the most effective home for world-class talent. Right now, we are soon 300 people from 30 different nationalities. Over half in our people come from somewhere else than Finland. We have people with very different kinds of backgrounds and are different kinds of professionals. We have programmers, we have game designers, we have artists, we have animators, just to mention a few. Altogether, we have 14 different disciplines. Why does international talent choose us? Well, the most important thing is our company culture. Low hierarchy, multicultural, learning and development possibilities and that we are housed full of passionate people. We hear that during the recruitment process, people feel that they have been treated as an individual, not only as one person amongst the other in the process, and that says something about our culture. We are also known for our healthy work-life balance. And of course, our previous games plays a big role. I meet all of the candidates in the final stage of the interview, and they often tell me how they have been playing our games either recently or a long time ago and been dreaming of one day become a Remedian. Also, Finland plays a role. We are known to be a clean and safe country, and we have nature around us. After a working day, you can go hiking in the woods, bicycling or kayaking in the archipelago and still be living in the middle of Helsinki. When people join us and choose to come to Finland, quite often, they also have a family that will move together with them, and we also care about our people's families. We have a group organization that organizes different kinds of events, well, this year, mostly remote events. But mostly or most importantly, people get to know each other in similar situations and get networks, get friends in a new country. We efficiently attract and recruit in a highly competent talent market. Here are some figures from this year until today, and our recruitment process is very efficient. It's systematic, and we do everything we can to attract the best people out there. The recruitment is led by professional recruitment and talent attraction team. During the past 4 years, we have been developing and taken into use sophisticated people processes to be able to empower our teams and people. Of course, recruitment, talent attraction, employer branding has been in the core, and we have been growing from 4 years ago, a bit over 100 people to soon 300 people. We support our people, our talent in various kinds of ways when it comes to relocation, learning and development, occupational health, just to mention a few examples. Wellbeing, both physical and mental, is very important for us. And especially during this year, with the ongoing pandemic, it's been even more important. Having great leaders who support and coach their people is very important. We have ongoing leadership development where our leaders have learned how to communicate with different kinds of people, how to motivate, how to have one-on-ones, how to give feedback. Our leaders have ongoing one-on-ones with all of their team members to be able to support them here and now, but also looking into the future. And we in HR, have ongoing one-on-ones with the leaders so that we are able to support them. The rewarding, it has to be wholesome, it has to be fair, but still take into consideration the exceptional performance. And today, you have heard already many times mentioning about us being a multi-project organization. And that has also given us possibilities to give our people more learning and development possibilities than before. This year, over 40 people have already been given a chance to proceed in their career within Remedy. We also measure our employee engagement on an ongoing basis. The reason why we do that is that we want to know where we are right now and what we can do and better in the future. We can look at the company as a whole, we can look at different teams, we can look at different projects. We measure the engagement with 14 different drivers, drivers that are very important according to engagement and motivational theories. In the one-on-one discussions that we are having with the leaders, we also look at these this so that we are able to know and figure out what are the most important things to focus on in that specific team or that specific project. Our engagement score right now is 8.2 out of 10, and we are benchmarked against other similar companies who also value these kinds of things, and we are doing great. People in the game industry tend to move around quite often. It's not unusual that after a project, people start to think about another project, another company. According to some research, in the gaming industry, the employee turnover is, in average, about 15%. We want to keep our people. We make a lot of effort in defining the best talent out there, so we want to keep them at Remedy. That's why I'm very happy to say that at Remedy, we have been managed to keep a hold of our talent even better every year. I'm also glad to say that we have people who have left Remedy for one reason or another, but have returned to Remedy. As said already earlier, wellbeing, both physical and mental wellbeing, is very important for us. And also during this year, which has been very special for all of us, we also wanted to measure our COVID response. And according to this, our people think that we've been responding appropriately to the COVID situation. The safety precautions we have taken have been the right ones and that the wellbeing has been in the core when decisions have been made. Just a few small examples what we have been doing when it comes to the well being. We have people from all over the world, and some of them might live totally alone. So we have different kinds of channels where they can still continue socializing with their colleagues so that they don't feel that they are alone. We also have a wellbeing channel where we -- every week, almost even every day, post every kind of hints and tips, links, videos how our people can take care of their own mental and physical wellbeing in this current situation. So to sum it all up, to be able to be the most attractive game industry employer, we will continue to attract, find, support, support competence and knowledge sharing, support development possibilities to be able to be the most attractive home for our world-class talent. Thank you.

Thank you, Mikaela.

You mentioned that we've put a lot of effort into finding new talent, but it's also important to keep hold of your existing talent. So why has Remedy's employee retention improved so drastically over the years?

Well, I think the most important thing is us becoming a multi-project organization because that has given our people possibilities to learn and development and have internal career paths. Then our great leaders and continuous leadership development, I think, is one very important thing as well and our healthy work-life balance. I think those are the most important things.

Good to hear. Thank you, Mikaela.

And now it's time for our final presenter. He really doesn't need an introduction, but I'm going to do one anyways. He has the mind of David Lynch, the moves of David Bowie and the face of Max Payne. He is the one and only Creative Director, Sam Lake.

Thank you, Lauri, for that very creative introduction. I'm very proud of you. Hey, everyone. I'm Sam Lake, the Creative Director of Remedy Entertainment. I hope you've been enjoying the presentations from my esteemed colleagues. One more, once more with feeling. I have been at Remedy almost from the beginning, so over 25 years, and for over 25 years, we have been crafting award-winning games, always taking the learnings from one project to the next and growing the company in the process. I'm going to talk about what makes a Remedy game unique and where we are planning to take our games in the future. What makes a Remedy game? What are our fans eagerly waiting for in our games? What are we passionate about? What do we believe in? What excites us, what are we best at? I'm going to start by going back to the beginning. Remedy was among the very first to bring stories and storytelling into action games with our Max Payne. And thrilling stories into action game framework has been a key principle of a Remedy game ever since. Through storytelling, we create immersive, deep worlds for our players to dive into. We create character-driven experiences, where the hero, the character you play is aspirational and relatable to make you care about what happens to the character and to give you the power fantasy of stepping into the shoes of that hero. Stories are universal. A good story resonates across the globe. We create a story-focused experience to take you on a thrill ride filled with twists, turns and cliffhangers to keep you on the edge of your seat. We believe that compared to the traditional linear media, having these storytelling elements in a game experience can make them even more thrilling and engaging as the player is an active part of the experience. We bring our story to link to the service of gameplay, which is at the heart of any game experience. What the player does, what the player is able to do, the gameplay is the king. And storytelling is a vehicle that pulls the players in to make them care about the stakes they are fighting for in the game. Our core gameplay is action gameplay. We create polished, explosive, visually stunning action experiences. The goal is always to have the core gameplay that is easy to pick up, yet hard but rewarding to master in order to craft an experience that is interesting and stays engaging for a long time. We want to find hooks for the key gameplay mechanics that make them memorable for the gameplay but also connect to the experience on a deeper thematical level. In Max Payne, we use bullet time, slow motion mechanics to elevate the gun play. In Alan Wake, dynamic light was your weapon against the forces of darkness. And in Control, we focused on the game physics and dynamic destructability of the environments to give you supernatural abilities. You could use to control everything in the world around you as a weapon in a visceral and satisfying way. Now in Crossfire X, we have a version of bullet time to elevate the action and to showcase the incredible visuals our team has created for this game. With our node-like engine, we are constantly pushing the visual fidelity as far as the current generation of hardware allows, working together with the hardware manufacturers to make this possible. And why is this? Well, to allow our artistic visions to be fully realized and to create unique, recognizable Remedy game look that stands out and has won multiple awards with Control alone. We see our games as entertainment experiences. We all play games at Remedy, but very consciously, we also look for inspiration in other mediums, in art and popular culture overall, movies, TV shows, books and so on. We are always looking for fresh, new ideas to bring into games, ideas and elements that have not been seen or experienced in interactive form before. With our storytelling, we have transported the players into different story genres and settings, from hard-boiled, crime thrillers to supernatural horror from epic science fiction to high-octane war stories. No matter what the genre, it's always our unique take on it to make our games stand out and to make our experiences fresh and memorable. We have an active, ever-growing fan base and community. We love our fans. We love you. You are hugely important to us, always eagerly waiting for the next Remedy game, and our fans are out there, spreading the word. We are very grateful for this. Our fans also are inspired by our games to create art. There is a lot of passion involved. And again and again, we have been blown away by the art our fans create. This, in turn, inspires us in our work. Our fans keep reminding us how important and how cool games are and can be. So we can't wait for the world to return to a more normal state, to be able to go out there to meet you all, again, face-to-face in trade shows and other gaming events. What is the future then? The video game industry is constantly evolving. And we want to be there. We want to be part of the cutting edge. We want to keep expanding our mastery, bring what we do best into new areas and with that to provide our players' unforgettable journeys into new worlds that we create. Control was a clear leap forward as a Remedy game with a lot more player choice and agency, a bigger, less linear world to discover and explore, and overall, a longer playthrough time than in any previous game we have made, all the while retaining and pushing forward the action and storytelling aspects we are known for. This is our mission going forward. We want to be even better in the areas we are known for, but also to keep challenging ourselves to look for new areas to explore, more player choice, less linear experiences, character progression and role-playing game elements added to action adventure context to bring in more player agency. As an example of new exciting area to explore, we are also looking into cooperative multiplayer with project Vanguard, co-op multiplayer, exploring what would be a unique original Remedy take of a game like that. I'm very excited about the concept and the ideas the team is working on. With Crossfire working with Smilegate, we had the opportunity to bring our storytelling expertise, what we do best to the Crossfire universe. And with that, to reach a staggeringly large new audience. As Johannes mentioned, Crossfire is one of the most popular games in the whole world. And now our story-driven single player content plays a key role in world and character building in this universe. That alone is very exciting, but interesting for the future as well to keep exploring how these different elements, single player story, multiplayer action can be used together to create something that is more than the sum of its parts. I mentioned that we see our games as entertainment experiences. When we set out to create a new game and story, we always want to create something that can also be translated into other mediums. Our first focus is always in games, but we are looking for ways to expand our brands beyond games as well. In the past, the Max Payne movie was made. In Quantum Break, we created a TV show inside the game. Currently, we are in the process of creating Alan Wake TV Show. Sure enough, it has taken some time, but it is going forward. And on top of that, we are now getting a lot of excited, extremely high-profile interest for Control transmedia as well. Control was our first game where we officially introduced the Remedy Connected Universe, connecting the worlds of our 2 large game brands, Control and Alan Wake into the same universe. This has been our plan for a long time. We want each of our games to stand on their own feet to be exciting and enjoyable on their own, even if you have never played a Remedy game before. But now with the Remedy Connected Universe, each game is also an introduction and a gateway into a larger universe, where more games and experiences are waiting for you. Each game is a stepping stone and a doorway to other games. And for our existing fans, there is this larger narrative leading to thrilling crossover events. More new game brands will be introduced into the Connected Universe in the future. And the next big Remedy game we are working on will take place in the same universe. Here, you can see an older photo, no masks before COVID. But you can see just a part of the awesome, talented Remedy crew. As with any high-quality entertainment, our mission is to provide a thrilling escape from our, sometimes too hectic and even depressing, everyday life. Hello, 2020, I'm looking at you. An escape into more exciting worlds that you can't wait to return to. This is our passion. This is what we believe in. Thank you.

Thank you, Sam, for your kind and inspirational words.

You mentioned that we are moving towards less linear experiences. But what does less linear mean for storytelling in the video games?

Yes, like as you have seen with our earlier games, we can do traditional linear stories. And -- but the thing is that in a game, the player wants to be in control. And no matter how well you do a linear story, be it in a game experience, that might not be what the player is interested just then. And they might be distracted and impatient to move on. But there is something magical that happens. When you break the story apart and make it part of the goal for the player to find a story and consume the story at their own pace, suddenly, they are very interested, very engaged and emotionally invested. And when they discover these story elements in the world, it's a reward for them. So these are the elements we are looking into and also true that actually discovering that this will lead into more story to be discovered in the world. With Control, we took a clear step into this direction, and we are in this journey to discover more.

Sounds great. That's all the time we have. And I want to thank you for watching. It's now time for a late goodbye. Thank you for watching. Thank you for sending your questions. For more answers, please send us an e-mail to [email protected]. I'm Lauri Haavisto, and this has been the very first CMD of Remedy. Stay safe, stay healthy. Thank you. Goodbye.